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New grounds for claims of Swiss franc borrowers

The Regional Court of Warsaw has ordered a bank to return over two million zlotys to a client, having ruled that their contract was void. Artur Sidor, a partner at Pietrzak Sidor & Wspólnicy, comments in a piece written for Dziennik Gazeta Prawna: “The judgment is not yet final but one may already speculate that it may be a valid authority for another string of successful lawsuits brought by Swiss franc borrowers, based on entirely different legal grounds as compared to the majority of cases litigated so far”.

Banks as managers of customers’ interests

Mr Sidor argues that as far as banks are concerned, the west European legal scholarship treats banks as managers of financial matters of their customers, noting that this approach is increasingly often followed by Polish jurists. “This means that a bank is legally obliged to limit its activities that aim at maximising profits precisely because of the duty of care over a customer’s financial interests. Also, the Polish Supreme Court has developed in its jurisprudence a list of general obligations of a bank towards customers and other persons affected by the bank’s operations. These obligations are a consequence of banks having the status of institutions of public trust. As such, the obligations do not need to originate from specific contractual clauses, bank rules and regulations or provisions of law”, the piece reads.

A bank’s breach of the above general obligations may result in its liability to pay damages to an affected customer. “This was precisely the situation in the case decided by Warsaw’s Regional Court. According to media reports, the conduct of the bank and its appointee, a financial advisor, was extremely dishonest and the information they provided to a customer – “blatantly inaccurate”, Mr Sidor wrote.

ECJ ruling on the duty to properly inform a customer

In the context of the Warsaw court’s judgment, Mr Sidor points to a decision of the Court of Justice of the European Union, in which the Court reviewed Swiss franc-denominated loans given by a Romanian bank. “The CJEU ruled that the absence of proper notification of the foreign exchange risk and related economic consequences (i.e. the risk’s impact on the value of loan repayments) may lead to a significant imbalance of parties’ contractual positions”, the piece reads.

An opportunity for business borrowers

According to Artur Sidor, a bank’s failure to provide sufficient and adequate information on the credit risk, financial advisors’ behaviour that involves inducing purchases of additional, risky products or other disturbing behaviour contravening the principles of public policy can be cited as a cause of action brought by Swiss franc borrowers against banks.

“Importantly, this line of authority may be relied on by businesses taking legal action against banks, in particular by small companies that have no proceeds in Swiss francs. In fact, this is the only ground they may use as remedies against abusive clauses are available for consumers only. Still, in practice, a difference between a business and non-business customer is often illusory and the bank has overwhelming contractual and informational advantage over both”, Mr Sidor concludes in his piece.